Yelnick has a completely different, and much more sophisticated/purist take on the current wave structure than Carl Futia. Yelnick is the man as far as I'm concerned, when I'm looking for EW meta commentary.

The bottom line is that this '5 wave advance' has not been 'impulsive' and does not signify a new bull market, like Futia and Caldaro are calling for.

and to illustrate that point with the S&P500 futures:

A close up of the possible leading diagonal that may have taken shape:

The most probable size of wave c is equality with wave a which would mean the terminus would be at 1147. The next most likely is 61.8% of wave a at 1110 which is in confluence with the 50% retracement of the leading diagonal. The next likely is wave c being 1.618 a which would take it to 1206, any higher than that would be an impulsive move and in any case a close above 1216 would invalidate the bear case. C waves are persistant, broad and take on a five wave structure which can easily be mistaken as a new upswing so it should not come as surprise that this could go a lot higher than most are expecting!

The entire modern financial system is based upon a very small group of people having the power to create money out of thin air.

Prechter discusses current market conditions in the stock market and US Dollar

DrBubb, you were spot on last month pointing out where you thought the dollar would bounce. You did give two suggestions but one of them was right well in advance! If I had known EW better the clue would have been in the five wave extension in primary wave five in the run up from last November. The guideline being that extended fifth waves typically retrace fully. Having said that it did n't stop me increasing my trading account by 5% yesterday being long the dollar and counting waves. Profiting in the counter trend now.

The entire modern financial system is based upon a very small group of people having the power to create money out of thin air.

Interests:Trading and investing in stocks and commodities. Writing articles on related subjects, while building this website. I am interested in creating ways for communities

Posted 17 August 2010 - 11:21 AM

What’s next? “After the stock market tops, probably before December 2010, we’ll start the final – and most treacherous phase – of this bear market, which started at 2007’s high,” Neely adds. “Keep in mind, a Trending phase can produce the biggest profit potential at the lowest risk, over the shortest period.”

In the next interview of Glenn Neely’s “Stock Market Predictions 2010” series, Glenn Neely will introduce his revolutionary Neely River Technology. Neely River focuses on how to manage trades in an unpredictable market environment – how to enter positions, move stops, and exit positions without requiring any market perspective or forecasting expertise.

U.S. stocks could sink by more than 20 percent if the neckline of a head-and-shoulders pattern on the Dow Jones Industrial Average is breached, according to Elliott Wave International Inc.’s Robert Prechter.

“The coming months hold the potential to be the most exciting of the year so far,” Prechter wrote in his latest Global Market Perspective report. “Once the neckline is breached, the measured move for the selloff targets the area surrounding 8,000.”

A head-and-shoulders pattern occurs when an index forms three consecutive peaks, with the middle being the highest. The start of a decline is signaled when prices fall below a support level in line with the low points between the peaks. The Dow average traced the left shoulder of the pattern in January, followed by the head in April, according to the report.

Prechter, who is famed for predicting the stock market crash of 1987 via a system of measuring investor psychology known as the Elliott Wave Principle, said the right shoulder of the pattern is now ending and the downward-sloping neckline “displays market weakness.” The Dow, which closed at 10,405.85 yesterday, has fallen 7.1 percent from this year’s high on April 26 amid concern that European nations will struggle to reduce their budget deficits and speculation that the U.S. economic recovery may be flagging.

‘Several Thousand Points’

“The message from Elliott waves as well as this particular technical pattern, on both a long- and intermediate-term basis, is that the Dow’s next significant move should be a decline of several thousand points,” he wrote. “The next phase of selling should be broad-based, with all sectors participating.”

Japan’s Nikkei 225 Stock Average may exceed its April high in a rally likely to start in the next two months, according to technical analysis by Mitsubishi UFJ Morgan Stanley Securities Co.

The gauge climbed 49 percent from its March 2009 low through Aug. 31 last year, marking the first wave of a five- phase Elliott Wave rally, said Naohiko Miyata, chief technical strategist at the brokerage unit of Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank by market value. Since then, the average has fallen 11 percent, forming the second wave, he said.

“What comes next is a long and dynamic rally,” Miyata said. “The third wave is usually the biggest advance.”

Miyata said the second wave will likely be completed by about October, with the index possibly finding a bottom at the 8,600 level. That would be a 38.2 percent Fibonacci retracement from the April high, according to Bloomberg data. Once the retracement is completed, the third-wave will start, the analyst said.

The wave principle is a theory developed by accountant Ralph Nelson Elliott during the Great Depression. He concluded that market moves follow a five-stage structure of three steps forward and two steps back.

The S&P has finally passed the center of the bear market that began January 2008. That bear market is also the center of a 20-year consolidation beginning September 2000. As a result, on both a shorter- and longer-term timeframe, the S&P has passed the deep center of multiple, complex corrections.

Based on concepts Mr. Neely presented in his March 2010 interview, this means the S&P is moving out of its highly unpredictable phase (on multiple timeframes) and has entered a more predictable phase of development.

Why is this good news? When a market is predictable – whether it goes up or down, the economy is good or bad – trading opportunities will increase and money can be made. In addition, the forecasting environment will improve dramatically.

If you don’t get the NEoWave S&P Forecasting or Trading Service, this is a great time to subscribe to take advantage of improving market conditions.

So, is he bullish or bearish near term? He is looking for a low very soon with a biggish rally to come.

QUOTE

The most reliable sign a top is formingoccurs when analysts project a marketwill double or triple in value. Importantbottoms occur when calls for a 50-75%decline in value are common. With the“Hindenburg Omen” becoming popular,and a recent CNBC segment on “Dow5000” (a 50% decline from currentlevels), a low is imminent. Place a buylimitat 105.03 with a stop at 98.10 SPY

Interests:Trading and investing in stocks and commodities. Writing articles on related subjects, while building this website. I am interested in creating ways for communities

Posted 29 August 2010 - 10:04 PM

QUOTE (douche dore @ Aug 29 2010, 11:06 PM)

So, is he bullish or bearish near term? He is looking for a low very soon with a biggish rally to come.

Place a buylimit at 105.03 with a stop at 98.10 SPY

It seems he is not very certain yet, but has decided to take a bet on the Long sideTo me the "overwhelming Bearish sentiment" is not so clear or so overwhelming yet...

QUOTE (DrBubb @ Aug 29 2010, 06:37 PM)

During the week ended May 5, which was near the end of the most recent stock-market rally, AAII bears represented 29% of those polled. For the week ended Aug. 18, after a 6% slide in the market, 42% of AAII members were bearish.

By way of contrast, when the market was approaching its nadir in early March 2009, 70% of AAII members were bearish — confirming the index's contrarian value since stocks started a strong ascent shortly thereafter.

Since the survey began in 1987, its average bearish reading is 30%.

The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

I am currently reading Prechter's book and it appears that the author uses the dividend yield graph alongside the DJIA (or any other index) to help his labeling. The idea is that the stock dividends normally decline near the tops and rise near the bottoms. Does anyone happen to know where to get this information in a graphical format?

Stocks jumped Monday with the Dow rising 1.4% to 10,753 and the S&P gaining 1.5% to 1143, its highest close in four months.The S&P eclipsing 1130 for the first time since late June would seem to confirm the long-awaited technical breakout for the index, and could pull many reluctant investors off the sidelines. "Many automatic buy and sell orders are set around market milestones such as these, and investors watch those levels closely for clues about which way the market may go next," the AP reports.

But the wise move now is to sell this recent rally, says Robert Prechter, president of Elliott Wave International.

"I think we're getting ready for another leg on the downside," Prechter says, citing evidence of what he says are extreme levels of optimism, including:

-- The most-recent AAII poll shows bearish sentiment at 24%, less than at the Dow's peak in October 2007.Mutual fund cash positions being at record lows, which Prechter says should be taken at "face value" rather than the result of massive redemptions from equity mutual funds.

The TRIN Index (a breadth indicator) at one of its lowest levels in recent years, indicating extreme buying pressure of stocks at 52-week highs, i.e. investors chasing momentum/performance.In addition, Prechter notes volume has been punk during the rally in recent weeks a sign, to him, that buyers lack conviction.

The veteran market-watcher says the current environment is similar to the 1930-31 period. "The market can make its high while optimism makes a peak despite the fact you're going stair-step lower," he says. "What we had in May with the ‘flash crash' was the first wave down."

Prechter predicts these periods of downturns sandwiched around 4-5 months of recovery "where people think we've hit the bottom" is likely to "go one for quite a long time" until a true bottom is reached well below the March 2009 lows, much less today's levels.

Interests:Trading and investing in stocks and commodities. Writing articles on related subjects, while building this website. I am interested in creating ways for communities

Posted 24 September 2010 - 03:22 PM

Deflation: The Trend That's Become Too Obvious To Ignore

September 23, 2010 .. By Elliott Wave International

As the biggest credit bubble in history continues to shrink, consumer prices have stayed flat over the past several months, meaning there is no sign of inflation to come, despite growing commitments from the U.S. government.

So what's keeping inflation at bay, given all the stimulus money promised? The answer: Deflation -- an overwhelming urge for consumers to liquidate their assets for cash. And this new economic phase is finally becoming too obvious to ignore, as explained in recent commentary from the world's largest technical analysis firm.

"The economy is moving into a critical new phase, an outright deflation in which 'prices fall because people expect falling prices.' Obviously, this implies an element of recognition, as efforts to protect against indebtedness and falling prices contribute to further declines. We can tell deflation is entering a new stage because of the language and ideas that financial observers now use to describe it."-- The Elliott Wave Financial Forecast (September 2010)

Get an independent look at the future of the U.S. economy by reading Robert Prechter's FREE Deflation Survival Guide now. Newly updated for 2010, Prechter's 90-page ebook on deflation reveals the biggest threat to your money right now. You'll learn not only how to prepare for deflation and adapt during it; you'll also learn how to survive it and -- most important -- prosper during it, so you'll be ready for the buying opportunity of a lifetime at its end.

Interests:Trading and investing in stocks and commodities. Writing articles on related subjects, while building this website. I am interested in creating ways for communities

Posted 27 September 2010 - 11:48 PM

... as was posted on HPC:[quote name='OnlyMe' / date='27 September 2010 -]Bearish as usual but interesting that like MBS/CDO etc investors being herded into Junk bonds this time around as a result of fiddling with natural interest rate levels. Also comments on the definition of a bubble.

From:

The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

Interests:Trading and investing in stocks and commodities. Writing articles on related subjects, while building this website. I am interested in creating ways for communities

Posted 29 September 2010 - 02:48 PM

Prechter dissects an article from Bloomberg entitled "Atlanta Awash in Empty Offices Struggles to Recover From Building Binge," listing more than a dozen negative facts about that market referenced in the article. Yet the opinions the reporter found to quote in the article were positive, such as "Owners of troubled properties … said they remain optimistic," and "[A] senior vice president … said in an e-mail, 'Our outlook is positive'."

A new office tower on Peachtree Street may be 98 percent empty, distressed sales may be nearly half the market, and in-migration has fallen 82 percent in Atlanta, but those in the real-estate business are keeping their rose-colored glasses on. As are Warren Buffett and GE's Jeff Immelt, who claim things are getting better and there is no chance for a double-dip.

As long as the Fed keeps printing and academia keeps rolling out new theories, the cleansing of the multiple booms created by Fed interventions will continue for years. Those operating in the here and now of the real world have figured out that they should be deleveraging and saving. That may be interpreted by policy makers as doom and gloom, but it's just good sense

Interests:Trading and investing in stocks and commodities. Writing articles on related subjects, while building this website. I am interested in creating ways for communities

Posted 29 September 2010 - 02:51 PM

Those of us who believe that one of the best ways to keep proper tabs on the financial charade is by perusing the consistently accurate touts in Rick’s Picks should spare a thought for those still bogged down in ancient trading methodolgy that began life when the stock market was indeed a “market” like Elliott Wave, etc. A trading/investing friend of mine had 24 years in a row of profits until 2009/2010, when his proprietary trading method failed dismally. During the last 18 months, Bob Prechter has had more wrong calls than the Shanghai telephone exchange. Dr.McHugh likewise. (I must point out that I have great respect for both of these men — they are still as clever as they always have been, it is just that the rules have changed).

What Hindenburg?

It even looks like the otherwise invincible Charlie Nenner has got the top wrong (some say he is a secret agent of Goldman Sachs, but he does get it right 90% of the time). There are so many charting indicators (i.e., no fewer than six Hindenburg omens) that say this market should be collapsing – but it isn’t…so far. To cap it all, the infallible and rare VIX Bollinger signal almost two weeks ago signaled “down, down, down,” but in fact we have gone up, up, up! Meanwhile, the latest figures reveal that U.S. corporate insiders are selling 1411 shares (!) for every share they’re buying.

Undoubtedly, this market will not go down until “Da Boyz” are totally overwhelmed by some kind of trigger event that sets off a chain of events that will see the legs of their “table” collapse. It will be a “flash crash” of immense proportions rather than a “stair-step” decline. The only thing that is still favorable to Main Street is low interest rates, so when they start to rise, that will most likely be the trigger.

We've just posted Part 2 of Bob Prechter's video from September 20 with Yahoo! Finance Tech Ticker host Aaron Task and Henry Blodget, Prechter: Ominous Pattern in the DJIA . In this video, Prechter talks about a technical pattern he sees forming in the D